Monex ABS Good as Gold

The notes are backed by margin loans that are secured by gold, silver, platinum, and palladium, and direct exposure to these precious metals, according to Standard & Poor’s who will rate the deal.

The series 2013-1 notes will consist of senior/subordinate fixed-rate interest notes that have a stated final maturity of Feb. 15, 2015. The capital structure includes $65.32 million of ‘A’, fixed rate notes and $9.67 million of ‘BBB’ fixed rated notes.

MCC underwrites margin loans to its customer base, which then use the proceeds of the loans plus a required minimum amount of equity to purchase precious metals. The precious metals that the borrowers own serve as collateral for the repayment of the margin loans.

Each margin loan included in the securitized pool are collateralized by 100% of the precious metals purchased, according to S&P.

MCC issued two series of notes in August 2012: series 2012-1 class A, rated 'A', with an original principal balance of $21.775 million; and series 2012-1 class B, rated 'BBB', with an original principal balance of $3.225 million.

In December 2012 the issue issued series 2012-2 class A, rated 'A', with a principal balance of $87.1 million, and series 2012-2 class B, rated 'BBB', with a principal balance of $12.9 million.

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